Altona Limited purchased delivery equipment on March 1, 2016, for $130,000 cash. At that time, the equipment was estimated to have a useful life of five years and a residual value of $10,000. The equipment was disposed of on November 30, 2018. Altona uses the diminishing-balance method at one time the straight-line depreciation rate, has an August 31 year end, and makes adjusting entries annually.
Instructions
(a) Record the acquisition of equipment on March 1, 2016.
(b) Record depreciation at August 31, 2016, 2017, and 2018.
(c) Record the disposal of the equipment on November 30, 2018, under each of the following independent assumptions:
1. It was sold for $60,000.
2. It was sold for $80,000.
3. It was retired for no proceeds.